Can anyone explain all these new online car things to me?

Dr_Crypto

Things like Cinch? 

I only buy new cars but even then the service from car salesmen, even at premium marques, can leave a lot to be desired. 

When my OH goes to buy her cars (also new premium makes) she feels patronised by salesmen. I suspect she’d use these kind of things just to avoid speaking to a salesman. 

However, for me personally, they won’t work. I need to see the car and sit in it and all the rest. Then go to carwow, get the cheapest price, and get the local
dealer to match it. 

parking_question_chap

Judging by that pillock on the Cinch advert it seems their target market isnt the sort of person who is concerned with a test drive or service history. I would hazard a guess all they are bothered by is the badge and monthy repayments, so there isnt really any need to visit a dealer on that basis.

Grumpy_chap

parking_question_chap said:

all they are bothered by is the badge and monthy repayments, so there isnt really any need to visit a dealer on that basis.

Your comment makes me think about the people who used to steal VW badges. That fad really was "all about the badge"

princeofpounds

It's easy to explain why there are so many popping up in the UK. Take a look at Carvana in the US, which IPOed earlier this year. It's currently valued at $37bn, despite making only $5bn in revenues and no profits.

On the other hand, it has grown revenues 37 times over the last 5 years, so that's what's getting investors excited. Only 1% of used cars are sold online at the moment in the US, compared to 16% for other forms of retail, so it's not hard to imagine a multi-fold increase even from here. There's a bit of debate about how profitable it can become, but the model in these internet-disruption businesses is to scale first and monetise later.

Prior to Covid, it was valued at something more like $15bn, but people got extra-special excited about a car sales model that could function in a socially-distanced environment (Sales actually fell, but hey, not to near-zero like everyone else).

It doesn't cost that much money to get one of these operations set up (in the context of billions), so every private equity and venture capital house has been trying to replicate the model in other countries, including here in the UK. Spend a couple of billion to purchase your garage, your transporters, plus a stock of vehicles and a whole bunch of advertising (much of which you can finance with cheap debt rather than your own cash equity) and hope you create something that's worth tens of billions.

As to why people use them - don't underestimate how much the regular person hates the used car buying experience. Used car salespeople have a trust rating of just 9% (And those 9% are probably the families of used car salesmen!). People hate the price negotiation (that's pretty much the top complaint), the way paperwork is handled, trawling around the various lots looking for the right vehicle, having to decide after a brief test drive etc. 

AdrianC

Remote car brokers aren't anything particularly new...

Business leasing has been conducted by phone/email for decades. Personal lease companies have been up and kicking for years - and before them, brokers. Back in the mid 90s, there were umpteen brokers bringing in cars from the continent because parallel imports were thousands cheaper...

[Deleted User]

Buying brand new online from the likes of Car Wow then I understand as it is a good way to get a new car without the hassle. I wouldn't want to drop a decent chunk on a used car from somewhere like Cazoo without seeing it first though. But on the other hand I'm happy to chuck a £400 bid on a bangernomic on Ebay and buy blind.

Dr_Crypto

People are keen to pay a premium to avoid salesmen. It shows how awful car salesmen are when things have got to this level. 

oscarward

It’s important to me that I see if I can fit in the car and also mother in law will fit in back 😀  Just to go to the showroom and sit in it has stopped me buying even before a test drive. 

if it seems to work for me then a test drive to see if I can get the seat in a decent position, is the ride smooth, what is the vision out like , noise levels etc.  

then we go and look at the finance, obviously before looking I assess likely cost to change.

so the likelihood of my buying off a website is slim, the only time I did I had a test drive at a dealer who wouldn’t talk discounts so bought from drive the deal.

frost500

I can see online car buying as the future of the industry, as the vast majority of the public see a car the same way they see an appliance. And let's face it, all modern cars are the same anyhow, all built to the same standards, to the same emission regulations that make them extremely dull to drive. It is all about credit these days, and that is all done online anyhow. So who needs a showroom.....

..but myself personally, I would never buy a car online. I like to inspect cars myself, see how they make my feel, but then I don't buy new or newish cars, I prefer 20 year old cars that I can do up, because that's what I enjoy doing.

 But also I would never go to Curry's to buy a TV or washing machine, I would just order it online these days. 

What happens if you order a new car online, and the delivery process was not trailer delivered, but driven to your door from the dealer, which is 100 miles away for example. How can you trust the driver has respected the running in process?

Grumpy_chap

I do understand the online car purchase for brand new cars, as that is nothing more than getting the best deal on a product and shopping around as you would for a kettle or TV.  The last two brand new cars I was involved in buying were purchased through "remote" processes but only because the dealer I visited (and did the leg-work for the sale) was not interested in offering a competitive price.  I had decided what to buy, researched best available price and then sat as the local dealer to do the deal and offered nothing, so went home and did the remote purchase (one online, one over the phone) - both of these methods were really just brokers who introduced you to a dealer for the deal to be finalised.  I am surprised car dealers do not expect purchasers to have done some "homework" on the car and target price before visiting the showroom.  On both occasions, the dealer phoned later after the deal was done elsewhere and then bleated that they would have matched that "and some".  Too late then really.

For used cars, I think the idea of buying a car unseen is too big a risk.  That said, my neighbour's son just bought a 2016 A4 Ultra TDi, 15k miles, £12k money, looks absolutely fantastic and really like new, from CAZOO and is very happy with it.